“If it were always in one’s interest to be good, there would be no need for ethics.”[i] Companies are in business to serve in their own best interest. Corporations were originally founded to exist for a set number of years and were restricted from making charitable contributions. They are also limited to activities that are necessary for them to fulfill their charter. Most corporation charters have a sole purpose which is to make a profit. The time limitations have been lifted from corporations, and many have now become international.[ii] Corporations do not have a ‘social responsibility’ written into their charters; therefore the law cannot bind them to be environmentally sustainable. This issue affects everyone. They strive for profit at any cost affects consumers who are directly impacted from the manufacturing process of their product. It also affects the business employees who rely on the sales of the product to create job security for them, and it affects government employees and legislators since it is the role of the government to serve and protect its people and its land. The issue is then further divided by the question of who is to actually take responsibility when an abstract concept is being held liable. One can also examine the role of the government in enforcing and creating new legislature that works to regulate and control environmental sustainability, as well as the issues of corruption within that same political system. Business stems from a capitalist society. Within capitalism, the businessman has a responsibility to the business they work for to serve the needs of that company. In Milton Friedman’s article, “The Social Responsibility of Business is to Increase its Profits”, he argues that the executive has a responsibility to his employer to provide certain services: generally, to make as much profit as possible within the rules of society.[iii] An individual can choose to serve the common good by using their own resources to achieve that end, but when a group of people, such as those within a corporation, are forced to adhere to a declaration of ‘social responsibility’ that group must then ignore its financial backers and use funds towards something for which they were not prescribed. The individual worker is contracted to spend a set amount of time and energy working towards the goal of his employers. Once the company is forced to make changes that are no longer profitable for itself, but is instead sacrificing itself for the common good, we have a socialist society. “If they are to impose taxes and make expenditures to foster ‘social’ objectives, then political machinery must be set up to make the assessment of taxes and to determine through a political process the objectives to be served.”[iv] A socialist society does not support free enterprise while private enterprise is what forces people to take responsibility for their own actions. Friedman further argues that “there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.”[v] A hole in this argument lies with the key word of resources. When Friedman was writing, resources were still plentiful and consumer demand was not at such insane levels as it is today. It also assumes healthy competition within business that is now owned by a few powerful corporations that control today’s industry. The rules of the game have changed and so must the outcomes. In Ayn Rand’s novel, Atlas Shrugged, she proposes a world where free enterprise is being overcome by ‘social responsibility’. It makes for a great novel but as soon as Rand attempts to write her philosophy as pure philosophical thought, the argument no longer holds the same strength. Fiction allows us to play out scenarios and try to make predictions about the future, but it also tends to exaggerate circumstances. The argument that businesses are only responsible to make money misses the fact that at some point the resources run out or if we use toxins in our products, we are, in essence, killing our consumers. Industry is progressing at an unprecedented pace and is taking resources from nature faster than they can be replenished. Quantity is being pushed over quality. In today’s consumer society, it is easier, faster and cheaper to order two BigMacs from McDonalds than to eat a quality hamburger; because of this, corporations, whose main goal is to make money, try to create products for consumer consumption that are most cost effective to them, despite the consequences. “Justice and common decency, as well as self-interest, requires that these problems be addressed by those living in the economically developed world.”[vi] It is in the self-interest of the corporation to be environmentally sustainable, and by this, we mean not just ‘green’ in packaging, advertising and labeling, we mean truly sustainable. There are “many potential cost savings that can follow from eliminating wastes…Waste is a bad thing, both ecologically and financially.”[vii] Therefore, a company can still make a profit while also helping the environment. It is not in a company’s best interest to kill its consumers or to destroy their land. ‘Green’ building design helps decrease capital costs in that it helps reduce heating and cooling costs and allows for more natural lighting. A business man is responsible to his employer, who is in turn responsible to the business owner, there is a human chain of command and this business works to produce an object or a service to meet consumer demand and is therefore responsible to the consumer. The issue is when consumers, through means of advertising and other psychological forms of manipulation, are convinced that they truly need something. People are allowed to invent whatever they wish, but the levels of influence are such, that someone’s mentality is switched someone needs to be held responsible for this level of consumer brain washing. Businesses have a social responsibility to allow their consumers freedom of thought. If we did not allow businesses to make a profit, our current society would crumble. The producers and free thinkers of the world would disappear into the millions of individual faces and nothing would be accomplished. Businesses run within set rules ‘of the game’. The ‘game’ does not yet include environmental limitations, they are left to the individual to regulate and as such, are not regulated by businesses which are not individuals. If you tell a man that the money that he has worked hard to earn is in fact not his, but belongs to a common group, eventually that man will stop working. We can’t tell businesses that their responsibility is not to make a profit. It is their responsibility to their owners, employees and stockholders. What we can do, is to change the rules of the game. If we enforce laws that put limitations on natural resources, it is in the company’s best interest to comply so as to avoid legal actions and to continue making the largest profit that it can. In an article by Michael Connor, he argues that what we in fact need is a ‘shared value’ for business and society.[viii] Businesses should be allowed to make money but should not ignore current societal issues. “Business and social interests are not mutually exclusive; in broad terms, what’s good for society is good for business. Therefore, business has a vested interest in addressing society’s challenges.”[ix] ‘Shared Value’ is a term coined by Harvard Business School professor Michael Porter and Mark Kramer who together founded a social impact consulting firm. They propose the idea of economic value, which is different from ‘social responsibility’. Economic success must be at the center of what companies do, and in the end, it will help them be more profitable while also helping society. “The concept of shared value resets the boundaries of capitalism…By better connecting companies’ success with societal improvement, it opens up many ways to serve new needs, gain efficiency, create differentiation and expand markets.”[x] Society is shifting yet is currently forced to adhere to old methods of doing things. As technology becomes the forefront of advancement, we need to redefine our approaches. ‘Social responsibility’ is extremely abstract and cannot be effectively enforced or regulated, while economic value can actually be quantified. In conclusion, businesses have a responsibility to their stockholders to make money. This fact is essential in the definition of a business. Through their quest for profit, they should not ignore their responsibility to their consumer and their larger impact on the world through their production methods. Current business methods were developed when resources appeared to be infinite, now that we know they are not, we need to adjust the ‘rules of the game’ and show corporations the value in the environment. The longevity of the ‘corporation’ relies on its ability to foresee the desires of its consumer. Sustainability is also friendly to the corporation. New developments in technology help make sustainable features fiscally beneficial options. Reforms are needed. The government is the body that is responsible to the people and to the environment and does not have profit as a motivation. It is there to serve and protect its assets and as the plunderers come, it is the role of government to enforce the laws of the land and to create new laws regulating the use of that land. Government corruption on this topic is unfortunately common, as is business corruption. Many of the people who run corporations studied management and therefore, do not consider or comprehend the scientific aspects of their decisions. We have free speech, yet people are paid to keep silent. The scientific world relies on proof while what we most need is the ability to freely speculate. Environmental toxin poisoning is difficult to prove as an isolated cause of human health issues. If scientists were allowed to publish speculations on heated topics, new developments could arise simply from the desire to find and prove new ideas. “There is no professional journal wherein a scientist is free to speculate publicly to any extent.”[xi] Business exists to make money. That is not a ‘social responsibility’ at all, but a private one. The only ‘social responsibility’ a business has is to satisfy its consumers. In today’s world, that means investing in shared and economic value.
Business stems from a capitalist society. Within capitalism, the businessman has a responsibility to the business they work for to serve the needs of that company. In Milton Friedman’s article, “The Social Responsibility of Business is to Increase its Profits”, he argues that the executive has a responsibility to his employer to provide certain services: generally, to make as much profit as possible within the rules of society.[iii] An individual can choose to serve the common good by using their own resources to achieve that end, but when a group of people, such as those within a corporation, are forced to adhere to a declaration of ‘social responsibility’ that group must then ignore its financial backers and use funds towards something for which they were not prescribed. The individual worker is contracted to spend a set amount of time and energy working towards the goal of his employers. Once the company is forced to make changes that are no longer profitable for itself, but is instead sacrificing itself for the common good, we have a socialist society. “If they are to impose taxes and make expenditures to foster ‘social’ objectives, then political machinery must be set up to make the assessment of taxes and to determine through a political process the objectives to be served.”[iv] A socialist society does not support free enterprise while private enterprise is what forces people to take responsibility for their own actions. Friedman further argues that “there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.”[v]
A hole in this argument lies with the key word of resources. When Friedman was writing, resources were still plentiful and consumer demand was not at such insane levels as it is today. It also assumes healthy competition within business that is now owned by a few powerful corporations that control today’s industry. The rules of the game have changed and so must the outcomes. In Ayn Rand’s novel, Atlas Shrugged, she proposes a world where free enterprise is being overcome by ‘social responsibility’. It makes for a great novel but as soon as Rand attempts to write her philosophy as pure philosophical thought, the argument no longer holds the same strength. Fiction allows us to play out scenarios and try to make predictions about the future, but it also tends to exaggerate circumstances. The argument that businesses are only responsible to make money misses the fact that at some point the resources run out or if we use toxins in our products, we are, in essence, killing our consumers.
Industry is progressing at an unprecedented pace and is taking resources from nature faster than they can be replenished. Quantity is being pushed over quality. In today’s consumer society, it is easier, faster and cheaper to order two BigMacs from McDonalds than to eat a quality hamburger; because of this, corporations, whose main goal is to make money, try to create products for consumer consumption that are most cost effective to them, despite the consequences. “Justice and common decency, as well as self-interest, requires that these problems be addressed by those living in the economically developed world.”[vi] It is in the self-interest of the corporation to be environmentally sustainable, and by this, we mean not just ‘green’ in packaging, advertising and labeling, we mean truly sustainable. There are “many potential cost savings that can follow from eliminating wastes…Waste is a bad thing, both ecologically and financially.”[vii] Therefore, a company can still make a profit while also helping the environment. It is not in a company’s best interest to kill its consumers or to destroy their land. ‘Green’ building design helps decrease capital costs in that it helps reduce heating and cooling costs and allows for more natural lighting. A business man is responsible to his employer, who is in turn responsible to the business owner, there is a human chain of command and this business works to produce an object or a service to meet consumer demand and is therefore responsible to the consumer. The issue is when consumers, through means of advertising and other psychological forms of manipulation, are convinced that they truly need something. People are allowed to invent whatever they wish, but the levels of influence are such, that someone’s mentality is switched someone needs to be held responsible for this level of consumer brain washing. Businesses have a social responsibility to allow their consumers freedom of thought.
If we did not allow businesses to make a profit, our current society would crumble. The producers and free thinkers of the world would disappear into the millions of individual faces and nothing would be accomplished. Businesses run within set rules ‘of the game’. The ‘game’ does not yet include environmental limitations, they are left to the individual to regulate and as such, are not regulated by businesses which are not individuals. If you tell a man that the money that he has worked hard to earn is in fact not his, but belongs to a common group, eventually that man will stop working. We can’t tell businesses that their responsibility is not to make a profit. It is their responsibility to their owners, employees and stockholders. What we can do, is to change the rules of the game. If we enforce laws that put limitations on natural resources, it is in the company’s best interest to comply so as to avoid legal actions and to continue making the largest profit that it can.
In an article by Michael Connor, he argues that what we in fact need is a ‘shared value’ for business and society.[viii] Businesses should be allowed to make money but should not ignore current societal issues. “Business and social interests are not mutually exclusive; in broad terms, what’s good for society is good for business. Therefore, business has a vested interest in addressing society’s challenges.”[ix] ‘Shared Value’ is a term coined by Harvard Business School professor Michael Porter and Mark Kramer who together founded a social impact consulting firm. They propose the idea of economic value, which is different from ‘social responsibility’. Economic success must be at the center of what companies do, and in the end, it will help them be more profitable while also helping society. “The concept of shared value resets the boundaries of capitalism…By better connecting companies’ success with societal improvement, it opens up many ways to serve new needs, gain efficiency, create differentiation and expand markets.”[x] Society is shifting yet is currently forced to adhere to old methods of doing things. As technology becomes the forefront of advancement, we need to redefine our approaches. ‘Social responsibility’ is extremely abstract and cannot be effectively enforced or regulated, while economic value can actually be quantified.
In conclusion, businesses have a responsibility to their stockholders to make money. This fact is essential in the definition of a business. Through their quest for profit, they should not ignore their responsibility to their consumer and their larger impact on the world through their production methods. Current business methods were developed when resources appeared to be infinite, now that we know they are not, we need to adjust the ‘rules of the game’ and show corporations the value in the environment. The longevity of the ‘corporation’ relies on its ability to foresee the desires of its consumer. Sustainability is also friendly to the corporation. New developments in technology help make sustainable features fiscally beneficial options. Reforms are needed. The government is the body that is responsible to the people and to the environment and does not have profit as a motivation. It is there to serve and protect its assets and as the plunderers come, it is the role of government to enforce the laws of the land and to create new laws regulating the use of that land. Government corruption on this topic is unfortunately common, as is business corruption. Many of the people who run corporations studied management and therefore, do not consider or comprehend the scientific aspects of their decisions. We have free speech, yet people are paid to keep silent. The scientific world relies on proof while what we most need is the ability to freely speculate. Environmental toxin poisoning is difficult to prove as an isolated cause of human health issues. If scientists were allowed to publish speculations on heated topics, new developments could arise simply from the desire to find and prove new ideas. “There is no professional journal wherein a scientist is free to speculate publicly to any extent.”[xi] Business exists to make money. That is not a ‘social responsibility’ at all, but a private one. The only ‘social responsibility’ a business has is to satisfy its consumers. In today’s world, that means investing in shared and economic value.
[i] Hooker, John. “Why Business Ethics?”. Carnegie Mellon University, April 2003. http://web.tepper.cmu.edu/ethics/whybizethics.pdf
[ii] “Our Hidden History of Corporations in the United States.” Feb 2000. http://reclaimdemocracy.org/corporate_accountability/history_corporations_us.html
[iii] Friedman, Milton. “The Social Responsibility of Business is to Increase its Profits.” The New York Times Magazine, 13 Sept. 1970.
[iv] Friedman, Milton. “The Social Responsibility of Business is to Increase its Profits.” The New York Times Magazine, 13 Sept. 1970, p. 3.
[v] Friedman, Milton. “The Social Responsibility of Business is to Increase its Profits.” The New York Times Magazine, 13 Sept. 1970, p.6.
[vi] DesJardins, Joe. “Business and Environmental Sustainability.” Business & Professional Ethics Journal, Vol. 24, NOS 1&2, 2005.
[vii] DesJardins, Joe. “Business and Environmental Sustainability.” Business & Professional Ethics Journal, Vol. 24, NOS 1&2, 2005, p.42-43.
[viii] Connor, Michael. “Making the Case for ‘Shared Value’ for Business and Society.” World Economic Forum. 21 Jan 2011. http://business-ethics.com/2011/09/21/making-the-case-for-shared-value-for-business-and-society/
[ix] Connor, Michael. “Making the Case for ‘Shared Value’ for Business and Society.” World Economic Forum. 21 Jan 2011. http://business-ethics.com/2011/09/21/making-the-case-for-shared-value-for-business-and-society/
[x] Connor, Michael. “Making the Case for ‘Shared Value’ for Business and Society.” World Economic Forum. 21 Jan 2011. http://business-ethics.com/2011/09/21/making-the-case-for-shared-value-for-business-and-society/
[xi] J. W. Campbell, “The Laws of Speculation,” in Astounding Science Fiction, no. 50, September, 1952.
http://business-ethics.com/2011/09/21/making-the-case-for-shared-value-for-business-and-society/
http://web.tepper.cmu.edu/ethics/whybizethics.pdf